House builders will not continue to deliver high returns for investors, according to the co-managers of the Liontrust Special Situations fund.

Anthony Cross and Julian Fosh said they were sceptical about the “long-term sustainability” of the house building sector.

“We have ultra-low interest rates, we have a government policy that is deliberately trying to get the housing market going, we are now seeing talk about house price bubbles occurring,” said Mr Cross. “But in the meantime, people’s real wages are lower than they were in 2008, so we would question the long-term sustainability of trying to pump up the housing market.”

House builders rallied in the first half of the year, with Persimmon's shares climbing more than 50pc.

The sector was further buoyed after the Government said it was bringing forward the introduction of the Help to Buy mortgage guarantee scheme.

These companies service a global market place, have big distribution networks and enjoy barriers to competition, they said, and as such should deliver the “great long-term returns” for investors.

The managers have run the £1.1bn Liontrust Special Situations fund together for the past five years, delivering 123pc to investors over the period versus a sector average of 46pc.

The fund has slightly underperformed over the past year, returning 17pc versus a sector average of 24pc, but Mr Fosh said they would stand by their stock picks. “It comes with the territory that a style that focuses on quality will work better in some market conditions than others,” he said. “Our approach is to go with the flow and not alter the approach a jot.”

The Liontrust Special Situations is a favourite UK equity fund of Chelsea Financial Services, according to Chelsea’s managing director Darius McDermott.

“We like the managers’ investment style – they are buyers of business and not market noise,” he said.

The fund is not restricted in choice of investment by size or sector, which means they can invest across the entire UK market.

As a result, the fund has a good mix of companies of different sizes.

“The fund has underperformed the sector in the past 12 months, as it has not been exposed to sectors that have been very reactive to short-term investor sentiment and rallied more recently, but you would expect that with this fund and we’re not overly concerned by it,” Mr McDermott said.